Nvidia stock slips 1.1% after AMD secures OpenAI chip deal

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Nvidia stock slips

Highlights

- Nvidia stock slipped 1.1% as AMD’s new OpenAI chip deal intensified competition in the AI semiconductor space.

- Despite the setback, Nvidia’s $100 billion investment plan with OpenAI reinforces its leadership in AI infrastructure.

- Technical levels suggest support near $180 and resistance around $195, with potential recovery toward $200 if momentum returns.

From a technical standpoint, Nvidia is hovering just above a crucial near-term support area between $180 and $185. This band has repeatedly held as a floor during minor corrections since mid-August. Buyers have consistently stepped in around these levels, indicating strong institutional interest in defending this zone. If this support fails decisively, it could trigger a wave of stop-loss selling and increase bearish momentum. Should this support fail to hold, the next key zone lies near $170, where the stock consolidated before its previous breakout.

On the upside, resistance is likely to be encountered in the $190 to $195 range, where sellers have emerged in recent sessions. This area has acted as a supply zone, capping multiple intraday rallies in the past two weeks. A sustained close above $195, especially on strong volume, would confirm a breakout and likely attract momentum-driven buying. In that case, the stock may quickly retest its previous highs and attempt to establish new territory above $200. A clean break above $195 could set up a move back toward the psychological $200 level and ultimately $220, if momentum returns.

Nvidia stock price dynamics (August 2025 - October 2025). Source: TradingView

The 50-Day Moving Average has recently flattened around the $186–188 zone, suggesting consolidation after Nvidia’s strong rally earlier in the year. This flattening signals a potential pause in trend acceleration, as short-term price action digests prior gains. If price remains above the 50-day average, it would still be interpreted as healthy consolidation within a larger uptrend. Conversely, a decisive move below the 50-day could shift sentiment and invite more aggressive selling. Meanwhile, the 200-day moving average remains in a firm uptrend below $160, confirming the stock’s long-term bullish structure.

AMD–OpenAI alliance shifts sentiment in AI chip race

The recent softness in Nvidia’s share price was triggered by news that AMD has signed a significant chip supply deal with OpenAI, involving up to 6 gigawatts of compute capacity. This move marks a notable shift, as OpenAI has historically been closely aligned with Nvidia, whose GPUs have powered much of OpenAI's infrastructure to date. The market interpreted this as a strategic signal that OpenAI may be actively seeking to diversify its hardware dependencies.

While the AMD-OpenAI deal does not immediately displace Nvidia, it introduces a credible alternative in the AI compute space, prompting investors to reassess the extent of Nvidia’s competitive moat. The fact that OpenAI is also exploring custom chips with Broadcom adds further uncertainty. Together, these developments suggest that Nvidia’s near-monopoly in high-performance AI hardware could face meaningful challenges over the next 12–18 months.

In response, Nvidia has moved to counterbalance these developments by deepening its own relationship with OpenAI. The two companies have signed a letter of intent for Nvidia to invest up to $100 billion to supply 10 gigawatts worth of systems to OpenAI’s infrastructure roadmap. This massive deployment commitment underscores Nvidia’s ambition to remain the dominant supplier in AI training and inference workloads. If executed successfully, this deal could reinforce Nvidia’s central role in powering the next phase of generative AI expansion.

Short-term forecast and trading scenarios

In the base case scenario, where competitive threats are absorbed without major disruption to Nvidia’s market share, the stock could trade back toward the $200–$220 range over the next 4–8 weeks. This assumes continued demand from data center clients and no further regulatory pressure. Stable earnings revisions and sustained hyperscaler spending would likely support this moderate recovery path.

In the bullish case, where Nvidia gains additional strategic wins and accelerates delivery of its Blackwell chips, the stock could surge toward $230–$250. This would require stronger-than-expected guidance in the next earnings call and evidence that AI infrastructure demand is still expanding faster than supply. Such momentum could also attract renewed institutional inflows, pushing valuation multiples back toward their summer highs.

Cantor Fitzgerald analyst C.J. Muse reiterated a Buy rating on Nvidia with a $240 price target, calling it the “de facto AI infrastructure company.” He emphasized Nvidia’s dominant role in powering the global AI buildout, maintaining optimism even as investor enthusiasm for AI stocks begins to cool.

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